Mixing family and business is a long tradition in the grocery sector, but as many will have experienced, it is not always plain sailing. As well as the risks of paying in cash, explored last month, a range of employment law issues can arise when family become staff
By Alan Delaney
What legal issues can arise when employing family members?
Quite apart from any awkwardness that may arise between the employer and their relation who is an employee, what many family firms fail to consider is the effect on other staff. One of the issues that often arises in unfair dismissal claims is alleged inconsistency of treatment by employers. In other words, the dismissed employee says that colleagues have been treated more leniently in relation to conduct or performance issues.
Differential treatment poses other risks too, including constructive dismissal or potentially a discrimination claim under the Equality Act 2010, if a protected characteristic is involved. An example here could be agreeing to additional time off for a family member but refusing a similar request for time off for religious observance by a non-family member.
Therefore, fair and reasonable treatment of all staff is essential. It is good practice to have clear rules and policies that apply to all employees, whether they are family members or not, and to apply those rules to staff fairly. The same applies in relation to training and promotion opportunities.
Is there a need to issue a written contract to family members?
The Employment Rights Act 1996 requires that all employees must be provided with a written statement of particulars of employment. This must be issued within two months of employment starting and it must contain certain minimum information regarding the key terms of employment. This includes the names of both parties; the start dates of employment and when continuous service began; rate and intervals of pay; terms and conditions relating to working hours, holiday entitlement, sick pay and pension entitlement; notice period; job title, and a few more details besides. This stipulation applies to family members too.
Are there minimum notice periods that apply?
Yes, by law an employer must provide minimum notice. Where the person has been continuously employed for one month or more, the employer must give one week’s notice if the employment is less than two years; and thereafter where employment is more than two years, give the employee one weeks’ notice for each year of service up to a maximum of 12 weeks.
The law also requires, as a minimum, that after one month an employee must give one week’s notice if they wish to leave. Most retail sector employers will wish to contractually require their employees to give longer notice, so there is time to recruit a replacement – and the same should apply to employees who are also family.
Do all employed family members need to be offered pension arrangements?
The duties under pension auto-enrolment apply to all employers in the UK. From the date an employer becomes subject to these duties – their ‘staging date’ – the rules require that eligible jobholders must be automatically enrolled into a pension scheme unless they are already active members of the employer’s qualifying scheme.
These duties have been phased in with larger employers being subject to the obligations first. Those employing less than 50 workers were given staging dates between 1 June 2015 and 1 April 2017, so it’s important to establish the position of your own business. You can find out your staging date and obtain more information on these duties on the Pension Regulator’s website.
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Do you have a business, property or legal question or issue that you would like to know more about?
Contact Scottish Grocer and we’ll put it to an expert. Contact John McNee on 0141 567 6032 or john.mcnee@peeblesmedia.com
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